Revenue for fiscal year 2012 was $23.4 million, a 12 percent increase over fiscal year 2011 revenue of $20.9 million. Revenue for the three months ended December 31, 2012, was $6.2 million, a 21% increase over revenue of $5.1 million for the three months ended December 31, 2011.

The Company's deferred revenue, which the Company believes can be an indicator of future revenue trends, grew to $9.8 million at December 31, 2012, compared to $7.6 million at December 31, 2011, a 28% increase.

For fiscal year 2012, the Company had a net loss of $1.8 million, or ($0.10) per share. This net loss resulted primarily from a $3.3 million, non-cash impairment charge related to the Company's investment in and notes receivable from CoreTrace Corporation, which was partially offset by a $1.3 million non-cash credit to income related to a previously recorded liability for a potential earn out payment associated with the acquisition of TappIn, Inc. that will not have to be paid. Excluding these infrequent items that occurred only in fiscal year 2012, the Company had non-GAAP net income of $121,000, or $0.01 per share. The Company's comparable net income for fiscal year 2011 on both a GAAP and non-GAAP basis was $635,000, or $0.04 per basic common share.

For the three months ended December 31, 2012, the Company had net income of $1.3 million, or $0.07 per share. This result includes the $1.3 million non-cash credit to income, which is an infrequent item related to the previously recorded liability for a potential earn out payment associated with the acquisition of TappIn, Inc. that will not have to be paid. Excluding this infrequent item, the Company had a net loss on a non-GAAP basis for the three months ended December 31, 2012, of $36,000, or ($0.00) per share. For the three months ended December 31, 2011, the Company had a net loss of $505,000, or ($0.03) per share.

Adjusted EBITDA Excluding Infrequent Items was $2.7 million for fiscal year 2012 compared to $2.6 million for fiscal year 2011. Adjusted EBITDA Excluding Infrequent Items was $929,000 for the three months ended December 31, 2012, compared to ($115,000) for the three months ended December 31, 2011.

Amounts reported on a non-GAAP basis and Adjusted EBITDA Excluding Infrequent Items are not measures of financial performance under GAAP. Non-GAAP financial measurements and Adjusted EBITDA Excluding Infrequent Items have limitations as analytical tools and when assessing the Company's operating performance. Non-GAAP financial measurements and Adjusted EBITDA Excluding Infrequent Items should not be considered in isolation or as a substitute for net income or other income statement data prepared in accordance with GAAP.

Net cash provided by operating activities was $3.8 million for fiscal year 2012 compared to $2.8 million for fiscal year 2011. This cash flow performance allowed the Company to pay a special cash dividend of $0.07 per share in December 2012 and end the year with over $8 million of cash and $3 million of long term investments at December 31, 2012.

"Our continued revenue growth and strong cash flow performance demonstrates the strength of our solution portfolio, particularly our Enhanced File Transfer platform, and also reflects increased maintenance and support contract revenue across the majority of our product lines," said Craig Robinson, President and Chief Executive Officer of Globalscape. "I look forward to continued growth and increased profitability for fiscal year 2013."

Conference Call March 12, 2013 at 4:30 p.m. ET

Globalscape management will hold a conference call Tuesday, March 12, 2013 to discuss financial results for the fourth quarter of 2012 and the fiscal year as a whole as well as other corporate matters at 4:30 p.m. Eastern Time/3:30 p.m. Central Time. Those wishing to join should dial 1-877-941-8416 and use Conference ID # 4606251. A live webcast of the conference call will also be available in the investor relations page of the company's website at www.Globalscape.com. A webcast replay of the conference call will be available on the Company's website through April 13, 2013.

About Globalscape

San Antonio, Texas-based GlobalSCAPE, Inc. (NYSE MKT: GSB) is a leading provider of secure information exchange capabilities for enterprises and consumers through the development and distribution of software, delivery of managed and hosted solutions, and provision of associated services. The Company's solution portfolio facilitates transmission of critical information such as financial data, medical records, customer files, vendor files, personnel files and other similar documents between diverse and geographically separated network infrastructures while supporting a range of information protection approaches to meet privacy and other security requirements. These products provide the ability to monitor these activities, as well as access the underlying data, securely and flexibly through a wide range of network-enabled, mobile devices, including tablets and smartphones. The Company has thousands of enterprise customers and more than one million individual consumers in over 150 countries. For more information, visit www.Globalscape.com or follow the blog and Twitter updates.

Safe Harbor Statement

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. The words "would," "exceed," "should," "anticipates," "believe," "steady," "dramatic," and variations of such words and similar expressions identify forward-looking statements, but their absence does not mean that a statement is not a forward-looking statement. These forward-looking statements are based upon the Company's current expectations and are subject to a number of risks, uncertainties and assumptions. The Company undertakes no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise. Among the important factors that could cause actual results to differ significantly from those expressed or implied by such forward-looking statements are risks that are detailed in the Company's Annual Report on Form 10-K for the 2011 calendar year, filed with the Securities and Exchange Commission on March 29, 2012.

GlobalSCAPE, Inc.

Statements of Operations

(Unaudited)

(in thousands, except per share amounts)

Three months ended December 31,

For the Year Ended December 31,

2012

2011

2012

2011

Operating Revenues:

Software license

$

2,231

$

2,022

$

9,447

$

9,149

Maintenance and support

3,108

2,491

11,298

9,424

Professional services

534

406

1,547

1,772

Others

326

204

1,080

549

Total Revenues

6,199

5,123

23,372

20,894

Operating Expenses:

Cost of revenues

334

374

1,296

1,723

Selling, general and administrative expenses

4,270

4,310

16,801

14,466

Research and development expenses

870

765

3,531

3,124

Affiliated entity asset impairment

0

0

3,264

0

TappIn earnout liability not earned

(1,343

)

0

(1,343

)

0

Depreciation and amortization

266

220

1,217

790

Total operating expenses

4,397

5,669

24,766

20,103

Income (loss) from operations

1,802

(546

)

(1,394

)

791

Other income (expense)

(51

)

(10

)

(189

)

13

Income (loss) before income taxes

1,751

(556

)

(1,583

)

804

Provision (benefit) for income taxes

444

(51

)

217

169

Net (loss) income

$

1,307

$

(505

)

$

(1,800

)

$

635

Net income (loss) per common share - basic

$

0.07

$

(0.03

)

$

(0.10

)

$

0.04

Net income (loss) per common share - diluted

$

0.07

$

(0.03

)

$

(0.10

)

$

0.03

Average shares outstanding:

Basic

18,421

18,262

18,358

18,081

Diluted

18,959

18,262

18,358

18,747

GlobalSCAPE, Inc.

Balance Sheets

(Unaudited)

(in thousands except share amounts)

December 31,

December 31,

2012

2011

Assets

Current assets:

Cash and cash equivalents

$

8,079

$

8,861

Accounts receivable (net of allowance for doubtful accounts

of $171 and $170 on December 31, 2012 and

December 31, 2011 respectively)

3,350

3,433

CoreTrace receivable

-

761

Federal income tax receivable

-

244

Current deferred tax assets

177

938

Prepaid expenses

426

239

Total current assets

12,032

14,476

Fixed assets, net

1,202

1,067

Long-term investments

3,060

3,000

Investment in affiliated entity

-

2,278

Intangible assets, net

4,006

4,815

Goodwill

12,712

12,712

Deferred tax asset

535

-

Other assets

41

30

Total assets

$

33,588

$

38,378

Liabilities and Stockholders' Equity

Current liabilities:

Accounts payable

$

432

$

591

Accrued expenses

1,353

1,396

Deferred revenue

8,293

6,248

Income taxes payable

46

-

TappIn earn out, current portion

500

3,303

Long term debt, current portion

1,335

1,276

Total current liabilities

11,959

12,814

Deferred revenue, non-current portion

1,480

1,384

TappIn earn out, non-current portion

3,694

3,694

Long-term debt. non-current portion

4,389

5,724

Deferred tax liability

-

573

Other long term liabilities

62

53

Commitments and contingencies

-

-

Stockholders' equity:

Preferred stock, par value $0.001 per share, 10,000,000

authorized, no shares issued or outstanding

-

-

Common stock, par value $0.001 per share, 40,000,000

authorized, 18,846,547 and 18,691,947 issued December 31, 2012

and December 31, 2011

19

19

Additional paid-in capital

14,435

13,478

Treasury stock, 403,581 shares, at cost, at December 31, 2012

and December 31, 2011.

(1,452

)

(1,452

)

Retained earnings

(998

)

2,091

Total stockholders' equity

12,004

14,136

Total liabilities and stockholders' equity

$

33,588

$

38,378

GlobalSCAPE, Inc.

Statements of Cash Flows

(Unaudited)

(in thousands)

For the year ended December 31,

2012

2011

Operating Activities:

Net (loss) income

$

(1,800

)

$

635

Adjustments to reconcile net income to net cash provided by operating activities: